Altice Europe — Q3 2018 Earnings Presentation
25 slides from Altice Europe's earnings presentation, Nov 21, 2018
Slide 1: Altice Europe N.V. Q3 2018 Results
Altice Europe N.V. Q3 2018 Results November 21, 2018
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS Certain statements in this presentation constitute forward-looking statements. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this presentation, including, without limitatio
Slide 3: Altice Europe Core Strategy Starting to Pay
Altice Europe Core Strategy Starting to Pay Three pillars to deliver growth and enhanced profitability 1 2 3 Invest in best- Focus on Leverage in-class customer unique content proprietary experience assets infrastructure Fibre 4G+++/5G Revenue EBITDA margin OpFCF growth expansion generation 3
Slide 4: Q3 2018 Achievements
Q3 2018 Achievements Continued execution on Altice Europe turnaround and deleveraging 1 Differentiated strategy focused on investment in fibre and content continues paying off 2 Operational turnaround progressing: continued positive subscriber momentum in France and Portugal 3 Continued rapid expans
Slide 5: Positive Subscriber Momentum Continues
Positive Subscriber Momentum Continues All subscriber bases growing YoY. ARPU trends improving Altice France Q3-18 B2C trends Altice Portugal Q3-18 B2C trends Fibre net adds1 +64k +45% YoY Fibre net adds +44k +27% YoY Fixed B2C ARPU -1% QoQ vs -4% QoQ in Q22 Fixed B2C ARPU 0% QoQ vs -1% QoQ in Q2 Fi
Slide 6: Owner of The Leading Fixed Infrastructure in All Geographies
Owner of The Leading Fixed Infrastructure in All Geographies Very high-speed footprint across Altice Europe Fibre homes passed1 (m) N°1 N°1 11,9 4,4 10,9 4,3 2,0 2,4 2,3 8,4 2,1 9,9 2,9 8,5 6,3 8,1 6,3 0,3 0,0 0,0 Proprietary Rented 1. FTTH/FTTB homes passed as of Q3-18 for Altice Europe. Best estim
Slide 7: Strong Focus on Strengthening Balance Sheet
Strong Focus on Strengthening Balance Sheet Disposal cash proceeds, content monetization, crystalizing underlying value of Altice Announced Announced Pending Leverage Infrastructure Tower deals RMC Sport review 1 Wholesale: Canal+ (satellite only) Strategic review of fixed infrastructure • To acce
Slide 8: Business Review
Altice Europe Business Review 8
Slide 9: Altice France Outstanding Commercial Performance
Altice France Outstanding Commercial Performance 1.1m subscribers acquired YTD vs 1.1m subscribers lost between 2015 and 2017 B2C fixed net adds1 B2C mobile postpaid net adds2 (‘000) (‘000) Fixed B2C base 6.1m B2C mobile postpaid base 13.4m Of which Fibre 40% +378 +166 +96 +239 +69 +211 +56 +64 +44
Slide 10: Performance Driven by Operational Improvements
Performance Driven by Operational Improvements Structural changes enhancing customer experience and driving satisfaction Fixed customer complaints (third party data1) Mobile customer complaints (third party data1) -37% -55% Q3-17 Q3-18 Q3-17 Q3-18 Driving customer satisfaction and reducing opex 1. D
Slide 11: Agility to Address both Low-End and High-End
Agility to Address both Low-End and High-End Counter-attack peers in digital/low-end, leveraging high-end competitive advantage Digital / Low-End Non-Digital / High-End SFR agile to tactically follow peers promotions Market-leading distribution network RED by SFR: digital no-frills, transparen
Slide 12: Review of Altice France Fibre Infrastructure
Review of Altice France Fibre Infrastructure An attractive, high visibility, low-risk business model Very dense areas Demand for fibre driven by customer usage Largely covered by Altice France FTTB network Full competition of infrastructure Unanimous fibre push from all French retail No regula
Slide 13: Altice France Revenue Trends
Altice France Revenue Trends Encouraging sequential trends with total B2C growth QoQ Altice France revenue split1 Components of Q3 2018 revenue trends (€m) -5.5% YoY ex VAT benefit2 / -7.6% YoY reported • B2C: +0.9% QoQ and -6.4% YoY ex VAT benefit -1.4% QoQ 2 683 • Strong volumes driven by good sal
Slide 14: Altice Portugal Outstanding Commercial Performance
Altice Portugal Outstanding Commercial Performance Continued subscriber growth in both fixed and mobile segments B2C fixed net adds B2C mobile postpaid net adds (‘000) (‘000) Fixed B2C base 1.6m B2C mobile postpaid base 2.9m Of which Fibre 48% +49 +43 +46 +44 +33 +35 +38 +37 +33 +34 +6 +4 +6 +8 1 +1
Slide 15: Altice Portugal Revenue Trends
Altice Portugal Revenue Trends Continued improvement driven by growing subscriber base, ARPU under control Altice Portugal revenue split1 Components of Q3 2018 revenue trends (€m) -0.3% YoY • B2C: -1.8% YoY, +1.2% QoQ +1.8% QoQ • Fixed and mobile subscriber bases continue to grow 527 516 525 31 34 3
Slide 16: Financial Review
16 Financial Review altice
Slide 17: Altice Europe N.V. Pro Forma Financials
Altice Europe N.V. Pro Forma Financials Pro forma consolidated financials (IFRS 15)1 In million Euros Q3-17 Q3-18 YoY Reported Growth YoY Constant Currency Growth Revenue France 2,683 2,480 -7.6% -7.6% Portugal 527 525 -0.3% -0.3% Israel 252 232 -7.9% -7.5% Dominican Republic 157 140 -11.2% -8.4% Te
Slide 18: Altice Europe N.V. Pro Forma Debt Capital Structure
Altice Europe N.V. Pro Forma Debt Capital Structure1 Altice Europe N.V Gross Debt €32,470m Net Debt €29,991m Gross Leverage 6.1x Net Leverage 5.6x Altice Luxembourg consolidated 3.6% 4 Gross Debt €30,742m Altice Corporate Net Debt €28,743m Altice USA Inc. Financing S.à r.l. (ACF) Gross Leverage 5.5x
Slide 19: Altice Europe N.V. Pro Forma Debt Maturity Profile
Altice Europe N.V. Pro Forma Debt Maturity Profile1 Long-dated maturities Altice maturity profile1 (€bn) 0.1 0.1 0.3 1.6 4.3 2.7 2.7 5.3 12.2 2.3 0.7 Debt maturity summary: Altice Europe N.V. • €4.6 bn available liquidity2 • WAL of 6.2 years • WACD of 5.7% • 86% fixed interest debt 2018 2019 2020 20
Slide 20: Q&A
20 Q&A altice
Slide 21: Appendix
21 Appendix altice
Slide 22: Altice Europe 2018 Guidance (IFRS 15)
Altice Europe 2018 Guidance (IFRS 15) Altice France 2018 OpFCF • c.€1.5 to 1.6bn Altice Europe (ex Altice TV) • c.€2.3 to 2.5bn 2018 OpFCF Altice Europe reiterates plans to grow revenue, and expand Adjusted EBITDA and cash flow margins, over the medium- to long-term 22
Slide 23: Reconciliation of non-GAAP measures to operating profit
Altice Europe N.V. Reconciliation of non-GAAP performance measures to operating profit for the nine month period ended September 30, 20181 For the nine months ended In million Euros September 30, 2018 Revenue 10,634.1 Purchasing and subcontracting costs -3,276.2 Other operating expenses -2,381.3 Sta
Slide 24: Pro forma net leverage reconciliation as of September 30, 2018
Altice Europe N.V. Pro forma net leverage reconciliation as of September 30, 2018 €m Altice Europe N.V Reconciliation to Swap Adjusted Debt Actual PF Total Debenture and Loans from Financial Institutions 33,086 33,086 Value of Debenture and Loans from Financial Institutions in Foreign Currency conve
Slide 25: Pro forma net leverage reconciliation, new organisation
Altice Europe N.V. Pro forma net leverage reconciliation as of September 30, 2018 New Organisation €m Altice Luxembourg Consolidated Altice Altice Europe Altice Altice Altice Lux Altice TV ACF Europe N.V Altice Europe N.V (Pro Forma) Altice France Eliminations N.V International Luxembourg Conso Cons